Post Termination Restrictions – How Enforceable Are They?
“Post Termination Restrictions – How Enforceable Are They?” Employment Law Solicitor Emma Spandrzyk discusses in her latest Timms blog…
Post termination restrictions are often found in employment contracts in an attempt to protect an employer if a staff member leaves. Our Employment Solicitor, Emma Spandrzyk considers just how enforceable are they…
What Is A Restricted Covenant Or A Post Termination Restriction?
Post termination restrictions are clauses that prevent you from doing something after you have left your job.
What Type Of Restrictions Can An Employer Place On Me?
The most common type of restrictions are:
Confidentiality
This restriction will make it unlawful for you to divulge sensitive information about your employer, its customers, staff or suppliers;
Non-Competition
Typical clauses will prevent you from leaving your employer to work for one of its competitors;
Non-Solicitation
These clauses will seek to prevent you from approaching your employer’s existing staff or clients after you have left the business;
Non-Dealing
This restriction will prevent you from contacting and doing business with your employer’s existing customers after you leave.
Are They Enforceable?
The key thing to remember is that post termination restrictions will be unenforceable as being in “restraint of trade” unless your employer can show that:
- It has a legitimate interest that it is appropriate to protect; and
- The protection that is sought is no more than is reasonable with regard to the interests of the parties
What Is A Legitimate Interest?
Amongst others, typical examples will be to protect trade connections, trade secrets, confidential information and the stability of the workforce.
What Is Reasonable?
Each restriction should be drafted to ensure that it is appropriate to the individual employee and tailored to the role they hold and their level of seniority within the business.
Restrictions should also be limited in terms of duration, scope and geography.
Generally, restrictions lasting more than a year are likely to be unenforceable. As are restrictions that stop you working for a competitor UK wide indefinitely.
If a restriction is designed to protect your employer’s local customer base, a restriction that goes further than the local area will be difficult to justify.
In short, each restriction should be considered on its own merit and should be commensurate to your role and position within the business.
If I Breach My Restrictions, What Can My Employer Do?
If a restriction is enforceable and you are in breach, your employer can seek an injunction against you to prevent further breaches. In addition, you could face a claim for the loss that your employer has suffered as a result of your breach.
Your employer could also consider taking action against your new employer in certain circumstances, for example where it can be shown that your new employer induced you to commit the breach.
Our Top Tips
Always check your former contract prior to accepting or starting a new role. If you are unclear on the enforceability of your restrictions, seek advice immediately to minimise any risk.
When starting a new role, examine your post termination restrictions carefully. Always consider how they could impact future employment opportunities before agreeing new contract terms.
How Can We Help?
For further advice on restrictive covenants and enforceability, our dedicated Employment Team are on hand to help. For advice and assistance please don’t hesitate to contact me on e.spandrzyk@timms-law.com or 01530 564498. Alternatively, visit our website here.
July 2022